Geely set to go public on Shanghai stock exchange

Some analysts believe the listing in Shanghai will help Geely Automobile's merger with Volvo.

"We believe such proceeds are likely to be used for the Volvo merger, although Geely cannot explicitly state it before the merger approval by disinterested shareholders," said Shi Ji, an analyst at Haitong International, in an interview with Reuters.

In February, Geely Automobile and Volvo Cars said they are planning to merge and list in Hong Kong and possibly Stockholm in Sweden.

They said the merger would accelerate financial and technological partnership between the companies. It would also create the scale, knowledge and resources for the business to become a leader in the ongoing transformation of the automotive industry.

Yang said going public in the A-share market is interdependent of the planned merger and the company will push forward the two deals simultaneously.

Apart from Volvo Cars, Zhejiang Geely Holding Group holds a 9.7 percent stake in Daimler AG, parent company of German premium carmaker Mercedes-Benz. It also has shares in Malaysia's Proton and British sports car brand, Lotus.

Geely Automobile, one of the most popular brands in China, sold 1.36 million cars in 2019, ranking first for three years in a row as the best-selling Chinese private carmaker. It reported a profit of 8.19 billion yuan ($1.16 billion) that year.

In the first five months of this year, it sold 420,300 vehicles, seizing a market share of 6.9 percent year-on-year. Geely is targeting sales of around 1.4 million units for 2020.